The last quarterly report from LG noted record sales of 12.1 million smartphones in Q2, today's number's show the company has maintained that pace with 12 million units moved in Q3. It sold $2.75 billon worth of phones -- 24 percent more than during the same time period last year -- actually lost money thanks to competition driving prices down and the costs of a big marketing push. That won't stop LG though, as it plans to keep promoting the G2 and its back-mounted buttons, plus mid-tier phones like the L II and F line (there's no word on how much it's hoping the curved G Flex will contribute after it's unveiled next month).
If you're interested in how LG's TVs have managed, the answer is that they've continued a downward slide, with revenues in the home theater division dropping 7 percent from last year to a mere $4.5 billion. Lower demand and selling prices are cited as the culprits there, but LG's plan is to push OLED (at $10k a pop they should make up the shortfall easily, even after recent price cuts) and Ultra HDTVs. Overall, its net profit of $103 million in the July - September window dropped 34 percent from last year's results -- hit the PDF link below for the detailed results.
LG ANNOUNCES THIRD-QUARTER 2013 FINANCIAL RESULTS
Sales of Mobile Devices Increase 24 Percent From Same Period Previous Year
SEOUL, Oct. 24, 2013 - LG Electronics Inc. (LG) today announced third-quarter 2013 consolidated revenues of KRW 13.89 trillion (USD 12.51 billion). While competitive conditions in the TV sector and an unfavorable foreign currency exchange rate affected overall revenues compared with the 2012 third quarter, sales of mobile devices increased year-over-year by 24 percent. LG saw a 27 percent increase in third-quarter operating profit to KRW 217.80 billion (USD 196.34 million) compared with the same period last year.
The LG Home Entertainment Company reported revenues of KRW 5.01 trillion (USD 4.50 billion), a 7 percent decline from the same period a year ago, reflecting slower global TV demand and lower selling prices. Higher sales in developing markets such as Asia and the CIS region were offset by softness in Europe. Operating profit of KRW 124.40 billion (USD 111.68 million) increased both year-over-year and quarter-over-quarter as a result of more efficient management of operating and marketing expense. As it enters the holiday selling season, LG plans to expand global sales of premium products such as OLED TVs and Ultra HD TVs while continuing to carefully manage costs.
The LG Mobile Communications Company's third-quarter revenues increased by 24 percent compared with the same quarter a year ago to KRW 3.05 trillion (USD 2.75 billion). The company shipped 12 million smartphones in the third quarter but profitability and average selling price were affected by increased competition and higher marketing investments. LG plans to focus on increasing sales of new premium products such as the LG G2 smartphone during the peak holiday season as well as maximizing 3G and mid-tier mass devices such as the L II Series and F Series.
The LG Home Appliance Company recorded revenues of KRW 2.97 trillion (USD 2.68 billion), up 3 percent from the previous year largely due to the positive reception of its new washing machines and refrigerators. LG appliance sales increased in North America and China but slowed in developing markets. Despite higher overall revenues and improved cost structure, third-quarter operating profit decreased from the same period last year to KRW 109.20 billion (USD 98.17 million) primarily due to unfavorable foreign exchange movements.
The LG Air Conditioning and Energy Solutions Company reported relatively flat third-quarter sales and operating profit margin year-over-year with revenues of KRW 973 billion (USD 876.32 million). While increased R&D investments and weak global market conditions will continue to impact the business, the company will focus on growing its market share of non-seasonal products and higher-margin products such as new commercial air conditioning systems.
2013 3Q Exchange Rates Explained
LG Electronics' unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards) for the three-month period ending September 30, 2013. Amounts in Korean won (KRW) are translated into U.S. dollars (USD) at the average rate of the three-month period of the corresponding quarter- KRW 1,110 per USD (2013 3Q).
Earnings Conference and Conference Call
LG Electronics will hold a Korean language earnings conference on October 24, 2013 at 16:00 Korea Standard Time at the LG Twin Tower Auditorium (B1 East Tower, 20 Yeoui-daero, Yeongdeungpo-gu, Seoul, Korea). An English language conference call will follow later at 21:00 Korea Standard Time (12:00 GMT/UTC). Participants are instructed to call +82 31 810 3069 and enter the passcode 9084#. The corresponding presentation file will be available for download at the LG Electronics website (www.lg.com/global/ir/reports/earning-release.jsp) at 14:00 on October 24, 2013. Please visit http://pin.teletogether.com/eng/ and pre-register with the passcode provided. For those unable to participate, an audio recording of the news conference will be available for a period of 30 days after the conclusion of the call. To access the recording, dial +82 31 931 3100 and enter the passcode 142710# when prompted.
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